Archive | Current Affairs and ETFs

For the better part of 15 months, I have pounded the table for longer-term U.S. treasuries. Most financial pundits thought that I was nuts in December of 2013; they debated my scarcity premise throughout 2014 and they dismiss my relative value argument here in 2015. About the only concession? The talking heads have often acknowledged [...] Continue Reading...

McKinsey & Company, a multinational consulting firm, recently compiled data on global debt and economic growth. The company determined that worldwide debt has reached nearly $200 trillion dollars, up from roughly $140 trillion at the time of the 2008 crisis. Gross world product grew approximately $15 trillion to $70 trillion in the same time frame.
In [...] Continue Reading...

February has been a terrible month for the U.S. economy, but a wonderful month for U.S. stocks. Translation? Investors do not believe that the Federal Reserve will raise overnight lending rates during an economic slowdown.
Just how abysmal have the data been so far? Personal spending, construction spending, factory orders, international trade, business inventories, wholesale inventories, [...] Continue Reading...

David Bowie and Mick Jagger may believe that people are dancing on every street corner around the world. In actuality, however, they’re desperately competing with neighbors by devaluing their currencies.
The craziness in currency manipulation is occurring on every continent and in every region. Japan’s brazen quantitative easing (QE) program has seen the battered yen hurt [...] Continue Reading...

The cyclically-adjusted price-to-earnings ratio (a.k.a CAPE, P/E10, Shillerâ€™s P/E) evaluates the average inflation-adjusted earnings for the S&P 500 over the previous 10 years. The long-term CAPE average is 16.5. Todayâ€™s CAPE is north of 27. And despite numerous detractors on its predictive value, P/E10 led directly to a Nobel Prize for its creator, Robert Shiller.
With [...] Continue Reading...

Canada, India, Turkey, Australia, China and Denmark. What do all of these countries have in common? The central bank of each nation has eased monetary policy to stimulate respective economies in 2015. What’s more, none of these actions had been anticipated; rather, the media described rate cuts as “surprising” or diminished reserve requirements as “unexpected.”
In [...] Continue Reading...

The case for investing in riskier assets has often been described as a sensible quest for yield and/or capital appreciation in a world with ultra-low interest rates. That helps to explain why the S&P 500 has defied the odds with respect to corrective activity, garnering double-digit percentage gains in 2012, 2013 and 2014.
Yet the preference [...] Continue Reading...

Presumably, the Great Recession ended in June of 2009. Three months earlier on March 9, the stock market anticipated the modest recovery that is still intact. In essence, stocks began to rally well in advance of the actual turnaround in the U.S. economy.
Similarly, the 10/09/2002-10/09/2007 bull market ended roughly three months before the start of [...] Continue Reading...

Since the Reserve Bank of New Zealand first formerly targeted inflation rates roughly 25 years ago, other central banks around the globe have followed suit; that is, many banks have been setting medium-term rates that prices should rise on an annualized basis, and then presenting those percentages publicly.
Two-and-a-half years back, the U.S. Federal Reserve, placed [...] Continue Reading...

The scope (current euro-zone member nations) and size ($1.1 trillion euros) of the European Central Bank’s latest stimulus effort has delighted the worldwide investing community. In fact, many began betting on a monumental quantitative easing “project” the minute that Europe registered year-over-year deflation of -0.2% for the month of December. This can be seen in [...] Continue Reading...